Illinois Regulator Delays Implementation of New Financial Interest Disclosure

April 10, 2018

Due to efforts by the Illinois Land Title Association (ILTA), the Illinois Department of Financial and Professional Regulation (IDFPR) agreed to delay implementation of a new disclosure of financial interest form.

The IDFPR released a memorandum on April 3 that indicated the new form was to be implemented on April 4.

The new form can be accessed here. Instructions can be accessed here. The IDFPR had released a document that discussed the proposed regulatory guidance that addressed title agent compensation.

The ILTA was surprised by the immediate implementation of the disclosure. The association asked IDFPR for the delay so the industry could work with the regulator to get additional clarification about the form and help its members comply. The department indicated it welcomed public comments, but did not specify a deadline.

The IDFPR said the purpose of the form is to inform the parties purchasing title insurance products and services (i.e. sellers and buyers) that:

  • the parties have a right to choose who provides title insurance products and services
  • other consumer protection information is provided
  • the producers of title business or associate of producers of title business, title insurers and title agents are made known to them
  • the insurer and agent have made an affirmative statement of how much money the agent will make on the transaction
  • the costs of the title products and services are disclosed

“It is hoped the revision will make it clearer to sellers and buyers the cost of title insurance and settlement services for a home sale,” the department said.

The form requires signatures from the agent and underwriter to disclose estimated compensation the agent will receive for statutorily authorized services that are performed. The statement attests that nothing else of value has been exchanged and there has been no violation of the Illinois Title Insurance Act or the Real Estate Settlement Procedures Act.

The Title Insurance Act authorizes the department to prepare the disclosure form so that a producer of title business—usually the attorneys, real estate brokers or lenders in transactions—discloses their financial interest to any home seller and buyer involved in the closing process. This includes the title insurer, independent escrowee or title agent/agency involved in the closing. According to the IDFPR, the most common examples of this include an attorney having a financial interest in being the title agent or a real estate broker having a financial interest in a title agency owned by the broker’s parent company.

“ALTA supports the spirit of disclosure and transparency that helps the understanding of costs associated with title insurance,” said Justin Ailes, ALTA’s vice president of government and regulatory affairs. “Many members may not be able to practically comply with the new disclosure. ILTA and ALTA will continue working with the Illinois regulator to help them understand how they can modify this regulation so that industry can comply and consumers receive a better experience.”


Contact ALTA at 202-296-3671 or communications@alta.org.

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